Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Non-Deal Roadshow (September 2002)
22 slides from Fortum Oyj's roadshow presentation, September 2002
Slide 1: Focused Nordic Energy Company – Investor Meetings
Fortum Focused Nordic Energy Company Investor Meetings September, 2002 1
Slide 2: Overview of Fortum
Overview of Fortum l One of the leading Nordic energy companies l Second largest Nordic generator and supplier of power l The leading provider of district heating in Finland and Sweden l The leading Nordic refiner of clean traffic fuels l Total assets € 17.6 billion (June 2002) l Privatised in 1998
Slide 3: Fortum's Nordic Energy Strategy
Fortum’s Nordic Energy Strategy Fortum focuses on the Nordic energy market creating a platform for long-term profitable growth Create the Become the most Strengthen position leading power and attractive energy as a heat company supplier leading clean fuels refining company Excel in business performa
Slide 4: Consolidation proceeds in the European energy market
Consolidation proceeds in the European energy market Liberalization of the European markets is driving industry consolidation which is led by the major electricity groups. As the leading companies reach beyond national markets to gain scale, transnational major utilities emerge to the European marke
Slide 5: The Nordic markets are very fragmented
The Nordic markets are very fragmented Production in 2001, TWh 523 356 387 23 145 *) 85 499 80 Put together 68 *) the Nordic 29 *) 66*) 60 countries 213 68 *) represent a 42 262 substantial market on a Share of largest players in 2000 (*1999): European scale. 1st 1-3 1-5 all 5
Slide 6: Integrated Nordic Power Market
Integrated Nordic Power Market l Total electricity demand in the Nordic Cross Border Power Flows (2001, GWh) Nordic countries approximately 390 TWh in 2001 l Nordic electricity prices lowest 200 in Europe l Only 4%-6% of total current SWEDEN electricity demand can be FINLAND imported with the existi
Slide 7: Europe: Monthly Average Power Spot Prices in 2001 - 2002
Europe: Monthly Average Power Spot Prices in 2001 - 2002 60 50 40 30 20 10 0 2001 2002 UK Pool APX Polish PX LPX * NP System OMEL * LPX has merged into EEX in July 2002 7
Slide 8: Electricity supply/demand situation in the future in Nordic electricity market
Electricity supply/demand situation in the future in Nordic electricity market TWh/a 500 450 400 350 Other/not defined Oil 300 Natural gas Peat 250 Coal Nuclear Other renewable 200 Hydro Wind 150 Consumption 100 50 0 1990 2000 2010 2020 Source: Europrog / Finergy(2002); "Euroopan sähkömarkkinoiden k
Slide 9: Power and Heat
Power and Heat l 12.6 GW electricity generation l 1.3 million distribution customers capacity l Industrial and commercial supply l 57.7 TWh electricity output l Fortum connects 15% of Finnish l 65.1 TWh electricity sales and Swedish electricity customers l 8.6 GW heat capacity l 1.1 million retail c
Slide 10: Leading Nordic Power Generator
Leading Nordic Power Generator Nordic Generators: Fortum’s Flexible Low Cost Portfolio Still Room for Consolidation Fortum’s Nordic Generation by Fuel Type TWh 120 200 Thermal 10 % 100 80 Hydro 43 % 60 40 20 Nuclear 47 % 0 Vattenfall Fortum Statkraft Sydkraft Other Source: Company Report, January-Ju
Slide 11: Leading Nordic Power Distributor
Leading Nordic Power Distributor Nordic Electricity Distribution Customers (‘000s) l Nordic distribution market is 1,400 8,000 highly fragmented 1,200 l Approximately 520 distribution companies 1,000 l Around 13.6 million customers 800 600 l Fortum has today 1.3 million distribution customers 400 l
Slide 12: Leader in Nordic Heat Sector
Leader in Nordic Heat Sector Nordic District Heating Market Share l Fortum is #1 producer and supplier of district heat and process steam 15% in Finland and Sweden l 2001 pro forma heat sales of 10% Fortum of 22 TWh1) l District heat 14.5 TWh 5% l Process steam 7.5 TWh l Reliable heat revenues impro
Slide 13: Oil
Oil l Refining and Marketing l Retail l Refining capacity 14 l Some 1,000 outlets million tonnes/year (60% unmanned) l State-of-the-art l Shipping refineries l 29 arctic tanker vessels l Focus on special products l Exploration & Production l Efficient logistics l 38,600 boe/day Source: Company Figur
Slide 14: Leading Refiner in the Nordic Markets
Leading Refiner in the Nordic Markets Nordic Refining Capacities (Mt/a) l #1 Nordic refiner (total capacity 14 million tonnes/year) 15 l A leader in clean traffic fuel components 10 l All traffic fuel production capacity to be sulfur-free (<10ppm) from 5 2002 onwards 0 ExxonMobil Statoil Shell Hydro
Slide 15: Maintaining our strong niche position
Maintaining our strong niche position • Historically, Fortum´s margins 6 have averaged $2 above international refining margin 5 • This premium is foreseen sustainable by 4 • focusing on higher value- added products 3 • benefiting from opportunity to 2 utilize cheaper Russian crude and feedstocks 1 •
Slide 16: Strong Positions in Core Businesses
Strong Positions in Core Businesses l 11.5 GW Nordic electricity Fortum’s Nordic Market Positions generation Nordic l 7.9 GW Nordic heat generation Generation #2 Distribution #2 l 14 million tonnes specialised refining capacity Markets (Supply) #2 District Heating #1 Refining #1 All data as of March
Slide 17: Financials
Financials Fortum
Slide 18: Key Financial Indicators
Key Financial Indicators EBITDA EBIT m m 2,000 1,200 1,829 1,076 1,800 % % R 12.1 R 16.0 CAG CAG 1,000 906 914 1,600 1,537 1,477 1,400 1,228 800 705 1,200 1,091 586 1,000 600 800 400 600 400 200 200 0 0 1998 1999 2000 2001 2001 PF Power & Heat 1998 1999 2000 2001 2001 PF Oil Other Note: CAGRs from 1
Slide 19: Key Financial Indicators (cont'd)
Key Financial Indicators (cont’d) EPS Dividend per Share Dividend Yield % 28.3% 26.0% 0,6 CAGR 0,57 0.3 CAGR 7.5 0,55 0.26 30.1% CAGR 0,5 0.23 5.5 0,41 5.3 0,4 0.2 0.18 5.0 4.0 0,27 0,3 0.13 2.5 0,2 0.1 2.5 0,1 0 0.0 0 1998 1999 2000 2001 1998 1999 2000 2001 1998 1999 2000 2001 19
Slide 20: Key Financial Indicators (cont'd)
Key Financial Indicators (cont’d) Gearing ROE ROCE % Target 60-70% Target 12% % Target 12% 10.3 100 10 10 9.1 9.4 93 8.6 9 8.7 8.3 9 8.4 79 87 8 7.7 7.7 73 8 75 7 7 6 5.7 6 54 50 5 5 4 4 3 3 25 2 2 1 1 0 0 0 1998 1999 2000 2001 6/2002 1998 1999 2000 2001 6/2002 1998 1999 2000 2001 6/2002 20
Slide 21: Implementation of Strategy
Implementation of Strategy l Important steps for the ongoing repositioning of Fortum September 2000 May 2001 November 2001 March 2002 June 2002 Merger with Sale of Full acquisition of Sale of minority stake Sale of Brigg Länsivoima Humber Birka Energi in Espoon Sähkö power station June 2000 June 200
Slide 22: Next Steps
Next Steps l Commitment to value creation through further restructuring l Ongoing focus on improving business performance l Achieve full synergies and cost savings potential from Birka and other acquisitions l Complete divestments in progress (Germany, UK) l Review alternatives for Norwegian upstrea